Ener1 To Supply Li-ion Packs to Hyundai Heavy for Electric Buses; Complete Turnkey Solutions Agreement with Toro

Ener1 has signed up two new customers for its Li-ion batteries: Hyundai Heavy Industries (HHI) and Toro. Hyundai Heavy Industries in Korea will receive Li-ion battery packs for electric buses; the packs are similar configurations as packs currently in operation in California with AC Transit. The HHI contract is immediate; packs will be in buses on the road this year.

Ener1 will provide Toro with a complete turnkey solution to create a battery-powered mower using the hard carbon mixed oxide, 17.5 Ah cell developed for THINK. Charles Gassenheimer, Chairman and CEO of Ener1, announced both new customers during the company’s Q2 earnings conference call yesterday.

Gassenheimer also said that Ener1 is splitting the company into three product verticals, with profit and loss responsibility:

  • Transportation. Transportation comprises light and heavy duty vehicles, military and industrial, and continues to be the company’s primary market. The light duty passenger market remains a focus, but Ener1 is more aggressively pursuing higher-margin opportunities in light-duty fleet, heavy-duty buses, and military applications.

  • Small Cell & Consumer. Small Cell represents the legacy business of Ener1 Korea, the business previously referred to as Enertech International.

  • Grid Energy Storage. Gassenheimer said that Grid Energy Storage will be an increasing focus for Ener1.

Ener1’s strategy is therefore to build capacity in a way that is customer-agnostic. Shell capacity is the scarce resource and will be allocated to the different business units depending on a stringent assessment of the return on investment for each customer program. When assessing the attractiveness of a new program, Ener1 evaluates not only the headline pricing, but performs a comprehensive business assessment, including the implied engineering costs.

At this stage in the game, getting this right is absolutely critical to ensuring we prioritize the right programs. Programs where Ener1 can leverage an existing R&D spend are therefore particularly attractive. Ener1 is currently developing three different EV module configurations which can satisfy a number of different permutations at the PAC level.

—Charles Gassenheimer

Ener1 has now publicly announced two programs in the light duty passenger vehicle market (THINK and Volvo); one light-duty fleet market (Japan Post); three heavy duty programs, including Hyundai and AC Transit; two grid stores project with SS Car in Russia and PGE in the Portland, Oregon; two military industrial contracts with the TARDEC Humvee program; and the Toro program.

Ener1 is currently installing capacity supply up to 11,000 EV pack equivalents or 260 MWh of lithium-ion battery pack systems. Capacity could be increased to 15,000 EV pack equivalents quickly and inexpensively as customer demand dictates, Rick Stanley, President of EnerDel, noted on the call.

Ener1’s net sales in the second quarter were $16.1 million, an increase of 113% over net sales of $7.5 million in the second quarter of 2009. Net sales were $27.0 million for the six months ended June 30, 2010, an increase of 72% over net sales of $15.7 million in the prior year six month period.

Net loss was $15.5 million in the second quarter of 2010 compared to $13.0 million in the 2009 second quarter. Net loss was $31.0 million for the six months ended June 30, 2010 compared to $20.3 million for the six months ended June 30, 2009.

Basic and diluted net loss per share was $0.12 in the second quarter of 2010 compared to $0.11 in the second quarter of 2009. Weighted basic and diluted shares outstanding were 131.8 million and 136.0 million in the second quarter of 2010 compared to 113.8 million and 113.9 million in the second quarter of 2009.

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